ECONOMICS OF HEALTH CARE

Shannon Brownlee has a fascinating piece on health care in the latest Atlantic Monthly. Her thesis is that a chief problem of the US system is that we spend too much on health care because we reward physicians for performing services (procedures and tests) rather than obtaining results (curing or preventing ailments) and that we pay good ones at the same rate as poor ones. She contends that by changing the incentive system, we could save enough money to provide insurance for those who currently have none. Perhaps. I am skeptical of any study, however, that compares the US system with those of Western Europe. One of the chief differences that the per capita spending comparisons gloss over is geography: the US is stretched across a giant continent with many pockets of extremely light population density. Thus, we need more hospitals, expensive equipment, trauma centers, NICUs, and other very cost-intensive facilities per capita than the Europeans in order that all citizens have them within acceptable distance. So, even if the amount and quality of care were identical, the US system would be inherently more expensive.

FILED UNDER: Economics and Business
James Joyner
About James Joyner
James Joyner is a Security Studies professor at Marine Corps University's Command and Staff College and a nonresident senior fellow at the Scowcroft Center for Strategy and Security at the Atlantic Council. He's a former Army officer and Desert Storm vet. Views expressed here are his own. Follow James on Twitter @DrJJoyner.